Markets Lose Their Momentum

Stocks on Wall Street closed lower on Tuesday, with early gains eroding.

By the end of trading, markets were nearly flat or lower as both the Standard Poor’s 500-stock index and the Nasdaq composite lost less than a point and the Dow Jones industrial average dropped 0.3 percent.

Trading is likely to be thin this week, with Wall Street markets closing early on Wednesday and all of Thursday for the Fourth of July holiday. This lower volume could signify greater volatility, especially with the release of the nonfarm payroll report on Friday.

“While all eyes are on the payroll report, markets are holding up as investors are holding out on the hope that we’ll see higher highs,” said Todd Schoenberger, managing partner at LandColt Capital in New York. “We’ll mostly tread water until Friday, but people aren’t selling their gains.”

Wall Street has shown signs of positive momentum recently, with investors becoming more optimistic about the economic outlook since Federal Reserve officials signaled that the central bank’s bond-buying stimulus policy was not ending imminently.

Adding to the positive tone, the Ford Motor Company rose 0.4 percent after reporting “very encouraging” 13.4 percent growth of car sales in June.

Also, the Commerce Department reported that new orders for factory goods rose for a second straight month in May, adding to tentative signs of stabilization in manufacturing after a recent slowdown.

William C. Dudley, president of the Federal Reserve Bank of New York, spoke on Tuesday afternoon about national economic conditions.

“If labor market conditions and the economy’s growth momentum were to be less favorable than in the [Federal Open Market Committee]’s outlook—and this is what has happened in recent years—I would expect that the asset purchases would continue at a higher pace for longer,” he said.

His comments were closely scrutinized for clues about when the Fed might begin to scale back its so-called quantitative easing.

Read more of Mr. Dudley’s speech here.

In corporate news, the alcoholic beverage company Constellation Brands fell 3.6 percent after the company reported first-quarter earnings and revenue that missed expectations.

Pfizer and Novartis were said to be considering preliminary bids for Onyx Pharmaceuticals. On Sunday, Onyx turned down an offer of roughly $10 billion from Amgen. Shares in Onyx jumped 3.2 percent.

Shares in Zynga rose 6.5 percent after the company named Don Mattrick, the head of Microsoft’s Xbox business, as its chief executive.

Article source: http://www.nytimes.com/2013/07/03/business/daily-stock-market-activity.html?partner=rss&emc=rss